ECB Executive Board member Benoit Coeure spoke with France Inter radio on Saturday and spoke about a long-term divergence in European rates.
“What’s clear is that for a very long period, several years, monetary conditions will be divergent in the euro zone on the one and and in the US and the UK on the other,” he said. “We’ll keep rates close to zero for an extremely long period. The US and the UK will enter into a cycle of rate raises. That’s a decisive factor for market actors.”
He sounds a bit desperate because of the euro strength this week but he makes a good point. The risk is that the US and UK also keep rates low for the long haul.
